'Watershed moment': PM Modi hails India, EFTA trade agreement
India has signed a free trade agreement with the European Free Trade Association (EFTA), which includes Norway, Switzerland, Iceland, and Liechtenstein. The Trade and Economic Partnership Agreement (TEPA) is expected to bring in $100 billion in investments for India over the next 15 years. Prime Minister Narendra Modi called the deal a "new turn" and a "watershed moment." This marks India's fourth such deal since 2014. The previous deals were signed with Mauritius, the United Arab Emirates (UAE), and Australia.
Why does this story matter?
The free trade agreement will give a major boost to India's economy through foreign trade. It will likely benefit industries like pharmaceuticals, medical devices, processed food, and industrial goods. Set up in 1960, EFTA aims to promote free trade and economic integration between its members. It is among the 10th largest traders in the world in merchandise trade. The European bloc is also among the most important trading partners in goods and services for the European Union (EU).
PM Modi's statement on the TEPA signing
In a detailed statement, PM Modi said that the trade agreement demonstrates a mutual commitment to open, free, and equitable trade, as well as promoting growth and employment for young people. Despite structural differences, the economies have complementary aspects that will be a "win-win situation" for all nations involved, he noted. "With the opening of enormous trading and investment opportunities, we have reached a new level of trust and ambition," PM Modi said.
'Momentous occasion': Union Minister Piyush Goyal
The agreement was signed by Union Commerce Minister Piyush Goyal, his Swiss counterpart Guy Parmelin, Iceland's foreign minister Bjarni Benediktsson, Liechtenstein's foreign minister Dominique Hasler, and Norway's trade minister Jan Christian Vestre. On the occasion, Goyal described the deal as a "momentous occasion" and the "culmination of nearly 15 years of hard work, tremendous energy, and effort." He also pointed out that the event coincided with the International Day of Awesomeness, which aims to spread positivity and improve the world.
Agreement details, expected benefits
Under TEPA, India has sought $50 billion investment during the first 10 years, and another $50 billion over the next five years from the bloc members. It has also sought to facilitate the generation of one million direct employment in the country through such investments. The TEPA contains 14 chapters addressing topics such as trade in goods, rules of origin, trade in services, investment promotion and cooperation, government procurement, intellectual property rights (IPRs), technical barriers to trade, and trade facilitation.
Trade between India, EFTA nations
India's exports to EFTA countries during 2022-2033 amounted to $1.92 billion, compared to $1.74 billion in 2021-2022. Imports totaled $16.74 billion in the last fiscal year, down from $25.5 billion in 2021-2022, resulting in a trade deficit of $14.8 billion. Switzerland is India's largest trading partner among the four nations, followed by Norway. From April 2000 to December 2023, India received approximately $10 billion in foreign direct investments (FDI) from Switzerland, making it the 12th largest investor in India.
